Italian mafia would be using lira as a parallel currency, police say

An Italian police officer from the Finance Guard, equivalent to Federal Revenue inspectors in Brazil, revealed that criminal organizations in the country still use the currency from the pre-euro period for illicit transactions, Bloomberg reported.

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According to agency, it is not known the exchange rate of lira for euros or whether it exists, however the police say they still find lira banknotes linked to the mafia. The lira ceased to be legal tender at the end of February 2002 due to the introduction of the euro, the single European currency.

“We still discovered large quantities of lira,” said Giuseppe Arbore, a Finance Guard police officer who investigates financial crimes, during a parliamentary hearing on Thursday (13). “Italian lira still represents part of illicit transactions.”

“When a banknote is accepted by an organization internally, even if it is outside the law as a legal value, it can settle transactions. We are obviously talking about illicit organizations,” said Arbore.

These revelations follow a day of speculation and criticism of a proposal by members of Deputy Prime Minister Matteo Salvini's party to issue new bonds with a small nominal value (mini T-bills in English) to pay state bills. Some are concerned that this could be the first step towards a parallel currency, and even an exit from the eurozone.

Although it is just an idea, it is already being criticized by Finance Minister Giovanni Tria and his compatriot Mario Draghi, president of the European Central Bank. Both said it would increase the country's debt and would be illegal if used as a parallel currency.

It is not the first time that the mafia has been linked to the ancient Italian currency. In 2012, the report by the country's central bank's Financial Intelligence Unit revealed that it worked with the Anti-Mafia Investigation Directorate on “suspicious transaction reports” related to lira-euro exchanges.